On Tuesday, the USD/JPY passed the support of the 55-hour simple moving average. The event was signalling that the currency exchange rate could fall down to the 111.70 level.
At that level it would meet with the support of the weekly PP, 100 and 200-hour simple moving average.
The Bureau of Labor Statistics released US CPI data that came better than expected of 0.4% compare with forecasted 0.3%. Note, that the US Core CPI was released at the same time with the US CPI.
The data release caused a minor, but still notable reaction on the USD/JPY charts. Namely, the rate surged by 11 pips before retreating back down.
Watch the Economic Calendar analysis
This week has notable data releases that will both cause significant moves in various currency pairs and be covered by Dukascopy Analytics.On Wednesday, the UK Consumer Price Index will be released at 08:30 GMT. Afterwards, at 12:30 the Canadian CPI and Trade Balance will be released. This is expected to cause the biggest impact during this week.
The data flow will end on Thursday. The European Manufacturing PMIs will be released at 07:15 GMT and 07:30 GMT. Dukascopy Analytics will cover the 07:30 GMT, as at that time the German PMI will be published. The German data causes the biggest reaction on EUR pairs.
An hour later, at 08:30 GMT, the UK Retail Sales will be published.
Last but not least, the Canadian and US Retail Sales will be published at 12:30 GMT. Both data sets combined could cause a move on the USD/CAD of up to 30 pips.
Meanwhile, check out previous data release covers and economic calendar analysis on the Dukascopy Webinars YouTube channel.
USD/JPY short term daily review
The USD/JPY has passed the support of the 55-hour SMA below the 112.00 level.In theory, the currency exchange rate should decline, as it has no technical support as low as the 111.66 level. At that level the weekly pivot point, 100 and 200-hour simple moving averages were located at or close by.
On the one hand, the rate could pierce the 55-hour SMA and get through 112.00. In that case it would once more test the resistance of the 112.10 level.
Hourly Chart
On the daily chart there is a technical reason for the previous surge. The 100-day simple moving average together with the monthly PP at 110.90 provided the needed support.Initially they stopped the decline of the USD/JPY on Wednesday. On Thursday, the support levels caused a surge.
Meanwhile, the 200-day simple moving average at 111.50 failed to pause the jump of the currency exchange rate.
Daily chart
Since Monday, 72% of open position volume was short. It could be explained by bulls taking profits from the recent surge.
Meanwhile, in the 100-pip range around the pair trader set up pending orders were bullish. Namely, 55% of orders were set to buy.